You are in charge of your own credit, your credit report, and your credit score. It is important to maintain good credit habits. It's a fact of life, companies need to manage risk successfully or they won't be in business for long. Demonstrate good credit behavior and you will be presenting a positive picture of yourself to lenders. Show them that you know how to use credit responsibly, and that you are a risk well worth taking.
Here are some good credit habits that could pay big dividends!
- Pay your bills consistently on time. This is one of the most important things you can do to present a positive picture to lenders. Recent payment history is a major factor in determining your credit score.
- Limit the amount of money you borrow to what you can afford to repay. Sounds like an obvious and simple principle? Sure, but it's where countless consumers get into trouble. Take on too many loans, too many credit cards, or high interest rates, and before you know it, you're in trouble. You're behind on your payments, penalties and late fees are adding up, and a major portion of your income goes to servicing your debt, instead of securing your financial future.
- Limit the total number of credit cards that you maintain.
- Don't "over-apply". Applying for too much credit, or too many credit cards at the same time is not a good sign to lenders, and will lower your credit score.
- Use credit responsibly by maintaining a modest level of credit accounts in various categories: Retail accounts, installment loans, mortgage loans, finance company accounts, etc.
- Shop around for the best credit terms! Companies want your business. Even if your credit is less than perfect, very competitive rates still may be readily available to you. You can potentially save yourself a lot of money if you shop around for the best deal. Secure the best deal possible, then maintain a strong record of on-time payments!
- Stay on top of your credit! Check your credit report, your credit score, and monitor your credit information on all three credit bureaus on a regular basis. The only one who knows if the information in your credit report is accurate is you! So, it's up to you to make sure the information in your credit reports is accurate. It's a very small price to pay to potentially save tens of thousands of dollars or more!
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